Civil Society in the Information Age

The global economy is undergoing a fundamental transformation in the nature of work brought on by the new technologies of the Information Age revolution. These profound technological and economic changes will force every country to rethink long-held assumptions about the nature of politics and citizenship. At the heart of this historic shift are sophisticated computers, robotics, telecommunications and other Information Age technologies that are fast replacing human beings, especially in the manufacturing sector. The number of factory workers in the United States has declined from 33 percent of the work force to under 17 percent in the past thirty years, even as U.S. companies have continued to increase output and overall production, maintaining our country's position as the number-one manufacturing power in the world.For most of the 1980s it was fashionable to blame foreign competition and cheap labor markets abroad for the loss of manufacturing jobs in the United States. In some industries, especially the garment trade and electronics, that has been the case. Recently, however, economists have begun to revise their views. Paul Krugman of Stanford and Robert Lawrence of Harvard suggest, on the basis of extensive data, that "the concern, widely voiced during the 1950s and 1960s, that industrial workers would lose their jobs because of automation, is closer to the truth than the current preoccupation with a presumed loss of manufacturing jobs because of foreign competition."Automated technologies have been reducing the need for human labor in every manufacturing category. Within ten years, less than 12 percent of the U.S. work force will be on the factory floor, and by the year 2020, less than 2 percent of the entire global work force will still be engaged in factory work. Over the next quarter-century we will see the virtual elimination of the blue-collar, mass assembly-line worker from the production process.Until recently, economists and politicians assumed that displaced factory workers would find new jobs in the service sector. Now, however, the service sector is also beginning to automate. In the banking, insurance and wholesale and retail sectors, companies are eliminating layer after layer of management and infrastructure, replacing the traditional corporate pyramid and mass white-collar work forces with small, highly skilled professional work teams, using state-of-the-art software and telecommunications technologies. Even those companies that continue to use large numbers of white-collar workers have changed the conditions of employment, transferring workers from permanent jobs to "just in time" employment, including leased, temporary and contingent work, in an effort to reduce wage and benefit packages, cut labor costs and increase profit margins. Acknowledging that both the manufacturing and service sectors are quickly re-engineering their infrastructures and automating their production processes, many mainstream economists and politicians have pinned their hopes on new job opportunities along the information superhighway and in cyberspace. Although the "knowledge sector" will create some new jobs, they will be too few to absorb the millions of workers displaced by the new technologies. That's because the knowledge sector is, by nature, an elite and not a mass work force. Indeed, the shift from mass to elite labor is what distinguishes work in the Information Age from that in the Industrial Age.With near-workerless factories and virtual companies already looming on the horizon, every nation will have to grapple with the question of what to do with the millions of people whose labor is needed less, or not at all, in an ever-more-automated global economy. While mainstream Democrats and Republicans have embraced the Information Age, extolling the virtues of cyberspace and virtual reality, they have, for the most part, refused to address the question of how to insure that the gains of the high-tech global economy will be shared. Up to now, those productivity gains have been used primarily to enhance corporate profits, to the exclusive benefit of stockholders, top corporate managers and the emerging elite of high-tech knowledge workers. If that trend continues, the widening gap between the haves and have-nots is likely to lead to social unrest and more crime and violence. Millions of middle- and working-class Americans, worried about their own eroding economic fortunes, including loss of job security and falling real wages, may become easy prey to the nascent fascist rhetoric of the extreme right. The politics of scapegoating is already in ascendance, as right-wing politicians blame affirmative action programs, feminists, illegal aliens and immigrants, cheap labor abroad, the "international banking conspiracy" and the United Nations for the deepening economic malaise.The antidote to the politics of paranoia and hate is an open and sober discussion about the underlying technological and economic forces that are leading to increased productivity on the one hand and a diminishing need for mass labor on the other. That discussion needs to be accompanied by a bold new social vision that can speak directly to the challenges facing us. In short, we need to begin thinking seriously about what a radically different society might look like in an ever more automated global economy.In the past, when new technologies dramatically increased productivity, U.S. workers sought a share of the productivity gains and organized collectively to demand a shorter workweek and better pay and benefits. Today, instead of reducing the workweek, employers are reducing the work force. The new labor-saving technologies of the Information Age should be used to free us for greater leisure, not less pay and growing underemployment. Of course, employers argue that shortening the workweek and sharing the productivity gains with workers will be too costly and will threaten their ability to compete both domestically and abroad. That need not be so.Companies like Hewlett-Packard in France and BMW in Germany have reduced their workweek from thirty-seven to thirty-one hours while continuing to pay workers at the thirty-seven-hour rate. In return, the workers have agreed to work in shifts. The companies reasoned that if they could keep the new high-tech plants operating on a twenty-four-hour basis they could double or triple productivity and thus afford to pay workers more for working less time.In France, government officials are considering offering to rescind payroll taxes for the employer if management voluntarily reduces the workweek. While the government will lose tax revenue, economists argue that it will make up the difference in other ways. With a reduced workweek more people will be working and fewer will be on welfare. And the new workers will buy goods and pay taxes, all of which will benefit employers, the economy and the government.In this country, the federal government ought to consider extending tax credits to any company willing to do three things: voluntarily reduce its workweek; implement a profit-sharing plan so that its employees will benefit directly from the productivity gains; and agree to a formula by which compensation to top management and shareholder dividends are not disproportionate to the benefits distributed to the rest of the company's work force. With such an incentive, employers would be more inclined to make the transition, especially if it gave them a marked advantage over their competitors.Two powerful forces increase the likelihood of a new accommodation between the U.S. management and work force. While reducing the labor component in the production process often translates into short-term gains for each company, employers are beginning to see a troubling decline in consumer purchasing power. As more and more workers are placed in temporary, part-time and contingent employment and experience a decline in wages, purchasing power diminishes. Even those workers with permanent jobs find their wages and benefits falling. The quickened pace of corporate re-engineering, technological displacement and declining income can be seen in stagnant inventories and sluggish growth, which in turn set off a new spiral of re- engineering, technology displacement and wage cuts, further fueling the downward drift in consumption.The second Achilles heel for employers in the emerging Information Age -- and one rarely talked about -- is the effect on capital accumulation when vast numbers of employees are reduced to contingent or temporary work and part-time assignments, or let go altogether, so that employers can avoid paying out benefits -- especially pension-fund benefits. As it turns out, pension funds, now worth more than $5 trillion in the United States alone, have served as a forced savings pool that has financed capital investments for more than forty years. In 1992, pension funds accounted for 74 percent of net individual savings, more than one-third of all corporate equities and nearly 40 percent of all corporate bonds. Pension assets exceed the assets of commercial banks and make up nearly one-third of the total financial assets of the U.S. economy. In 1993, pension funds made new investments of between $1 trillion and $1.5 trillion. If companies continue to marginalize their work forces and let large numbers of employees go, the capitalist system will slowly collapse on itself as it is drained of the pension funds necessary for new capital investments.A steady loss of consumer purchasing power and a decline in workers' pension-fund capital are likely to have a far more significant impact on the long-term health of the economy than all of the much-ballyhooed concern over the national debt and budget deficits. Of course, even an "enlightened" management is unlikely to heed the warning signals without pressure being brought to bear from both inside and outside the companies. The thirty-hour workweek ought to become a rallying cry for millions of U.S. workers. Shorter workweeks and better pay and benefits were the benchmarks for measuring the success of the Industrial Age in the past century. We should demand no less of the Information Age in the coming century.Even with a much-reduced workweek, the United States and every other nation are still going to have to address the problem of finding alternative forms of work for the millions of people who are no longer needed to produce goods and services for an increasingly automated market economy. Up to now, the marketplace and government have been looked to, almost exclusively, for solutions to the growing economic crisis. Today, with the market economy less able to provide permanent jobs and with the government retreating from its traditional role of employer of last resort, the nation's civil sector may be the best hope for absorbing the millions of displaced workers.While politicians traditionally divide the United States into a spectrum running from the marketplace on one side to the government on the other, it is more accurate to think of society as a three-legged stool made up of the market sector, the government sector and the civil sector. The first leg creates market capital, the second leg creates public capital and the third leg creates social capital. Of the three legs, the oldest and most important, but least acknowledged, is the civil sector. For more than 200 years, this sector has helped shape the American experience. The nation's schools and colleges, its hospitals, social-service organizations, fraternal orders, women's clubs, youth organizations, civil rights groups, social justice organizations, conservation and environmental protection groups, animal welfare organizations, theaters, orchestras, art galleries, libraries, museums, civic associations, community development organizations, neighborhood advisory councils, volunteer fire departments and civilian security patrols are all part of the Third Sector. There are currently more than 1.4 million nonprofit organizations in the United States, with total combined assets of more than $500 billion.Nonprofit activities run the gamut from social services to health care, education and research, the arts, religion and advocacy. The expenditures of America's nonprofit organizations exceed the gross domestic product of all but seven nations in the world. The civil society already contributes more than 6 percent of America's G.D.P., and is responsible for 10.5 percent of total employment. More people are employed in Third Sector organizations than work in the construction, electronics, transportation or textile and apparel industries.The opportunity now exists to create millions of new jobs in the civil society. But freeing up the labor and talent of men and women no longer needed in the market and government sectors for the creation of social capital in neighborhoods and communities will cost money. The logical source for this money is the new Information Age economy; we should tax a percentage of the wealth generated by the new high-tech marketplace and redirect it into the creation of jobs in the nonprofit sector and the rebuilding of the social commons. This new agenda represents a powerful countervailing force to the new global marketplace.In the old scheme of things, finding the proper balance between the market and government dominated political discussion. In the new scheme, finding a balance among the market, government and civil sector becomes paramount.Since the civil society relies on both the market and government for its survival and well-being, its future will depend, in large part, on the creation of a new social force that can make demands on both the market and government sectors to pump some of the vast financial gains of the new Information Age economy into the creation of social capital. This third force in U.S. political life exists but has not yet been galvanized into a mainstream social movement. It consists of the 89 million Americans-one out of every two adults -- who give an average of four hours or more of their time each week to serve in the nonprofit organizations that make up the sprawling civil society. Third Sector participants come from every race and ethnic background, and from every class and walk of life. They are Republicans, Democrats and Independents. The one thing they share is a belief in the importance of service to the community and the creation of social capital. If that powerful shared value can be transformed into a sense of common purpose and identity, we could redraw the political map.There are signs of that beginning to happen. In cities and towns all over the country, civic organizations are joining together, many for the first time, to address the economic and social issues facing their communities. They are asking tough questions about the allocation of scarce economic resources and beginning to grapple with the very difficult issues of how to restore the work life and civic life of their communities.While public advocacy groups have long played this role in the Third Sector -- cajoling, pressuring and at times actively opposing powerful economic and political forces in their own communities -- what's new in the equation is the involvement of heretofore apolitical groups: fraternal, service, religious, educational and artistic. Feeling the pressure of both market constriction and government retrenchment, civic organizations are becoming increasingly worried about the very survival of the civil society. Their growing concerns are leading some of them, at least, to become more involved in collective efforts to solve communitywide problems.It's too early to predict whether these fledgling efforts will blossom into a mature social movement. What can be said is that seeds are being sown in communities across the country for the rebirth of the civil society as a powerful force in American life. There is much to be gained from the shift in political perspective away from the old polar model of market versus government to the new tripartite model of market, government and civil sectors. For example, consider the fortunes of four traditional constituencies -- people of color, labor, women and environmentalists -- in the new tripartite politics. People of color continue to be the primary victims of the revolutionary changes taking place in the nature of work. Technology displacement has affected African-Americans and other minorities in disproportionate numbers. According to a report issued by the Equal Employment Opportunity Commission, black wage-earners made up nearly one-third of the 180,000 manufacturing jobs lost in 1990 and 1991.Blacks also suffered disproportionately in the loss of white-collar and service jobs in the early 1990s. The reason for the heavy losses in black employment, according to The Wall Street Journal, is that "more than half of all black workers held positions in the four job categories where companies made net employment cuts: office and clerical, skilled, semi-skilled and laborers."Taxing a portion of the productivity gains of the new Information Age economy and allocating those funds to the creation of jobs and infrastructure in the civil sector is essential if we are to reverse the downward spiral of minority groups in America.Organized labor's hopes also rest, in part, on the emergence of the civil society as a new social force. Unions are finding it more and more difficult to recruit workers in the new economy. Organizing at the point of production becomes difficult, and often impossible, when dealing with temporary, leased, contingent and part-time workers and the growing number of telecommuters. At the same time, the strike is becoming increasingly irrelevant in an age of automated production processes. Joining with Third Sector organizations -- service, fraternal, civic and advocacy -- to exert a collective "geographic" pressure on management to share some of the gains of the Information Age with workers and local communities may be labor's best hope for success in the new era. Although the new economy is going to bring a fundamental shift in gender roles, with more women working in the marketplace and more men at home and in the community, women are still likely to remain the primary advocates of social capital because of their long-standing relationship to the Third Sector. Women have been the mainstay of the civil society for more than 200 years, volunteering their time to create the social capital of the country.Their contribution has gone largely unnoticed, in part because the political importance of social capital has gone largely unheralded. By politicizing the social commons, elevating the importance of social capital and making demands on the new Information Age economy to pump some of the gains into the civil society, women could help create a new third force in American politics over the next decade.Environmentalists also have much to gain from elevating the role of the Third Sector and making social capital equal in importance to market and public capital. The environmental community is currently involved in a debate on how to convince consumers to simplify their lifestyles in order to preserve the earth's dwindling resources and promote a sustainable economy. Unfortunately, as long as most people's primary identity is with the marketplace, the values of expanded production and unlimited consumption will continue to influence personal behavior. On the other hand, it is likely that the more time Americans spend in the Third Sector, as both paid employees and volunteers, the less consumer-oriented they will be, for the simple reason that personal relationships and community bonds will replace shopping as a life-fulfilling experience. Of the three forms of capital, social capital is the most environmentally benign. Unlike market or public capital, which use large amounts of the earth's resources, social capital uses relatively few resources, relying almost exclusively on the few thousand calories of energy each person requires daily to maintain a healthy mind and body.The ever-deepening problem of rising productivity in the face of declining wages and vanishing jobs is likely to be one of the defining issues all over the world in the years ahead. The growing social unrest and increasing political destabilization arising from this historic shift in work is forcing activists of every persuasion, as well as politicians and political parties, to search for a "radical new center" that speaks to the concerns and aspirations of a majority of the electorate. The conventional political discussion continues to take place along the polar spectrum of marketplace versus government -- a playing field that has become increasingly limited.Redirecting the political debate to a tripartite model -- with the civil society in the center between the market and government spheres -- will fundamentally change the nature of political discourse and open up the possibility of re-envisioning the body politic, the economy and the nature of work and society.


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